Do All Businesses Need an ABN in Australia?

Launching a new venture is exciting - and getting the legal basics right from day one will make everything else easier. A common early question is whether every business needs an Australian Business Number (ABN), and what happens if you start trading without one.

In this guide, we’ll explain what an ABN is, who needs it (and who might not), how it fits with different business structures, and the practical steps to apply. We’ll also cover invoicing and GST rules, “no ABN” withholding, and the other registrations and documents that set your business up properly in Australia.

Our aim is to give you clear, confident answers - so you can focus on growing your business while staying compliant.

What Is an ABN and Do You Need One?

An Australian Business Number (ABN) is a unique 11‑digit identifier recorded on the Australian Business Register. It helps government agencies, other businesses and customers recognise your enterprise for tax and regulatory purposes.

Whether you need an ABN depends on what you’re actually doing. If you’re carrying on a business or enterprise in Australia - that is, operating in a commercial, organised and ongoing way - you’ll generally need an ABN.

• If you’re selling goods or services with the intention to make a profit, even on a small scale, you’ll usually require one.
• If you’re only pursuing a genuine hobby or one‑off activity, you typically won’t.

If you’re unsure whether your activity is a business or a hobby, it’s worth reading about what defines a business activity. Many new operators also think about the advantages and disadvantages of having an ABN before they commit.

Who Needs an ABN?

Most Australian enterprises will need an ABN, but not every individual will. Here’s how it breaks down.

Sole Traders

If you operate as an individual in your own name or under a registered business name, you’ll generally need an ABN for your sole trader business.

Partnerships

Where two or more people carry on a business together, the partnership (not the individual partners) needs its own ABN.

Companies

Companies are separate legal entities. If your business will run through a company, you register the company with ASIC (which issues an ACN), then apply for an ABN for the company. An ACN and ABN are different numbers used for different purposes.

Trusts

Trusts carrying on a business (for example, a family trust) generally need an ABN. The trustee applies for the ABN on the trust’s behalf.

When You Might Not Need an ABN

You usually don’t need an ABN if your activities are a hobby rather than a business, or they’re one‑off and not commercial in nature. That said, if you’re invoicing other businesses for your services or selling regularly to customers, having an ABN is often necessary in practice.

Contractors and freelancers who set their own hours and invoice for services almost always need an ABN. If you invoice a business without an ABN (and no exception applies), they may be required to withhold at the top marginal tax rate from your payment.

Invoicing, GST and “No ABN” Withholding

ABNs interact with invoicing and GST in specific ways. Getting these right helps you get paid on time and stay compliant.

ABNs on Tax Invoices

• If you are registered for GST, you must issue tax invoices that include your ABN for taxable sales.
• If you are not registered for GST, you do not issue tax invoices for GST purposes, but many businesses still expect an invoice that includes your ABN for identification.

When GST Registration Is Required

• You must register for GST if your GST turnover is $75,000 or more (or if you provide taxi/ride‑share services). An ABN is needed to register for GST.
• Below the threshold, GST registration is optional - but you’ll still need an ABN if you’re carrying on a business.

“No ABN” Withholding (47%)

• If you supply goods or services to another business and don’t quote an ABN, they may need to withhold 47% of the payment and remit it to the ATO unless an exception applies (for example, the supply is wholly private or the supplier is a genuine hobbyist).
• Providing a valid ABN on your invoice generally avoids this withholding and helps you get paid in full.

These tax settings can affect your cash flow, so it’s smart to plan ahead and speak with your tax adviser if you’re unsure how they apply to your situation.

Applying For, Updating or Checking an ABN

Applying for an ABN is free and usually quick.

How To Apply

1. Choose your structure. Decide whether you’ll operate as a sole trader, partnership, company or trust. If a company structure is right for you, you can get help with company set up so the entity is established properly before you apply for an ABN.
2. Gather details. You’ll need identity information and basic details about your business activities, start date and addresses.
3. Apply online. Submit your application via the Australian Business Register. Many applications are processed immediately, though some require additional checks.
4. Register for taxes as needed. If you expect your turnover to reach the GST threshold, register for GST when you apply. You can also add PAYG withholding if you’ll have employees.

Updating Your Details

ABN details should be kept current. If your business information changes (address, activities, contact details), update your ABN record promptly. If you change business structure (for example, from sole trader to company), the new entity will need a new ABN.

Checking an ABN

Before engaging a supplier or contractor, many businesses look up their ABN details to confirm they’re legitimate and active. Here’s a quick guide on how to check if an ABN is active and what to look for.

Beyond the ABN: Registrations and Key Legal Documents

An ABN is the starting point, not the finish line. Depending on how you trade, you may also need registrations and contracts that protect your business and keep you compliant.

Registrations and Business Setup

• Business name registration. If you trade under a name other than your personal name, register that name with ASIC. You’ll need your ABN to complete the process. If you’re ready, you can arrange your business name at the same time you set up other essentials.
• Company governance documents. Companies typically adopt a constitution and should maintain clear internal records (for example, director and shareholder decisions). Getting the structure right from the outset makes life easier as you grow.
• Licences and permits. Depending on your industry and location, local or state licences may apply (for example, food business permits, building approvals or labour hire licences). Check your regulator’s requirements before you start trading.

Core Legal Documents

• Customer Contract or Terms and Conditions. Sets clear rules for your sales or services, pricing, payment terms, liability and refunds. Good terms reduce disputes and speed up payments.
• Website or App Terms of Use. If you sell or interact online, terms of use help manage user conduct and your platform’s rules.
• Privacy Policy. If you collect personal information, you’ll need to comply with the Privacy Act. While many small businesses under $3 million annual turnover are exempt, there are important exceptions (for example, health service providers, businesses that trade in personal information or those required by other laws). Publishing a clear Privacy Policy is widely expected by customers and third‑party platforms, and is good practice even when not strictly required.
• Employment Agreement and Policies. If you bring on staff, provide clear written terms to manage hours, pay, duties, IP and confidentiality. While the law doesn’t always mandate a written contract, a well‑drafted Employment Contract helps ensure Fair Work compliance and prevent misunderstandings.
• Supplier and Contractor Agreements. Document key terms with your suppliers and contractors (scope, pricing, delivery, IP ownership and liabilities) so your supply chain is reliable.
• Founders or Shareholders Agreement (if applicable). If you have co‑founders or plan to raise capital, it’s important to agree on decision‑making, equity, vesting and exit terms early.

If you sell services or subscription products, consider using a tailored Customer Contract so your commercial terms are clear and enforceable from the start.

Practical Tips

• Banking and payments. Many banks and payment providers will ask for your ABN to open accounts or onboard you to their platforms.
• Insurance. Appropriate business insurance can complement your contracts as part of your risk management plan.
• Keep records. Accurate records of invoices, receipts and contracts make BAS, tax time and day‑to‑day operations much easier.

Key Takeaways

• An ABN is required for most enterprises operating in Australia; genuine hobbies and one‑off non‑commercial activities generally don’t need one.
• Sole traders, partnerships, companies and trusts each obtain an ABN for the entity that is carrying on the business; a company’s ABN is separate to its ACN.
• If you’re registered for GST, your tax invoices must include your ABN; without an ABN, businesses may need to withhold 47% from payments to you.
• Applying for an ABN is free and straightforward; keep your details up to date and obtain a new ABN if you change business structure.
• Beyond the ABN, set up core protections like a business name, clear customer terms, appropriate policies and written employment agreements where relevant.
• If you’re unsure whether your activity is a business or a hobby, or which structure fits your plans, it’s wise to get tailored advice early.

If you’d like a consultation on whether you need an ABN, choosing a structure, or getting your contracts and registrations in place, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.